*The Hard Thing About Hard Things*

by on October 16, 2017 at 12:20 am in Books, Education | Permalink

I loved this book, by Ben Horowitz of Andreessen-Horowitz, the venture capital firm.  While it is hard to pull bits from the broader stories, here are a few:

Most business relationships either become too tense to tolerate or not tense enough to be productive after a while.  Either people challenge each other to the point where they don’t like each other or they become complacent about each other’s feedback and no longer benefit from the relationship.

And:

People always ask me, “What’s the secret to being a successful CEO?”  Sadly, there is no secret, but if there is one skill that stands out, it’s the ability to focus and make the best move when there are no good moves.  It’s the moments where you feel most like hiding or dying that you can make the biggest difference as a CEO.

And:

The first rule of organizational design is that all organizational designs are bad.

And:

The purpose of process is communication.

And:

By far the most difficult skill I learned as CEO was the ability to manage my own psychology.

Finally:

CEO is an unnatural job.

Definitely recommended, it is one of my five favorite management books ever.  Furthermore, its lessons are relevant for people in academic, media, and policy worlds, unlike many other management books.  Is that because of an emphasis on talent evaluation and also work in teams and small groups?

1 Mike October 16, 2017 at 1:19 am

One of the best books on silicon valley leadership. The only question is how did we (your audience) let you down such that you only are finding out about this now?

2 Ray Lopez October 16, 2017 at 2:47 am

From the Amazon preview, it seems Horowitz is some sort of jock who occasionally fistfights, gives ultimatums to dates (it worked), is a U of Illinois “Netscape Marc Andreessen” crony, and a sort of larger-than-life frat boy, which fits in nicely in Silicon Valley from what I’ve seen. I’ll pass on whatever tough love valuable lessons there’s in this book.

3 Greg October 16, 2017 at 9:51 am

Sounds like you’re too focused on status groups. It’s quite good.

4 static October 17, 2017 at 9:23 am

Wrong on all counts.

5 jim October 16, 2017 at 1:47 am

“The purpose of process is communication.”

Along the same lines:

Organization and process are shared knowledge and experience.

6 dearieme October 16, 2017 at 7:15 am

Communication? Then he should learn to write better. “Most business relationships either become ..”: he doesn’t seem to mean business relationships, he seems to mean personal relationships within businesses. But it’s hard to be sure.

7 Art Deco October 16, 2017 at 12:14 pm

Weird oracular statements like ‘The first rule of organizational design is that all organizational designs are bad.” are not sterling examples of communication, ’tis true.

8 static October 17, 2017 at 9:24 am

Context. It’s obvious.

9 Ray Lopez October 16, 2017 at 2:37 am

Well, this might be a “Machiavelli” type of guy who has essentially failed (nothing wrong with that BTW) and is washed up but wishes to teach (“those who can, do…”). Against this book, there’s people like Harvey Weinstein who grope and shout their way to success. What communication skills does a Harvey Weinstein have? Except maybe being a ‘first mover’ and by historical accident he became the ‘go to’ guy in Hollywood?

10 Ted Craig October 16, 2017 at 8:29 am

He founded two companies, which he sold for a combined $1.7 billion. He then moved onto a VC fund that grew from $300M to $2.7B in three years. He also has a very well-read blog and this book was a best seller.

I wish I could fail like that.

11 static October 17, 2017 at 9:24 am

Why broadcast your ignorance?

12 Sebastião Thomaz October 16, 2017 at 3:40 am

Fantastic book, worth many rereads to really grasp its lessons and apply them on a day to day basis. Should be a must read in any management course.

13 dearieme October 16, 2017 at 7:16 am

“apply them on a day to day basis”: do you mean ‘apply them daily’? Communication!

14 Sebastião Thomaz October 16, 2017 at 7:32 am

Fair enough, not a native speaker

15 dearieme October 16, 2017 at 6:25 pm

Then my apologies if my teasing came across as rude.

16 static October 17, 2017 at 9:26 am

What’s the difference? Day to day does not mean daily. It implies most days, not every day. Your pedantic comments are inane.

17 Victoria October 17, 2017 at 4:53 pm

Thanks for the book suggestion. But after reading the snobby comments posted here, I’ll look for friendlier pastures. Some people seem to think intelligence makes up for discourtesy. Not at all. DearieMe managed to look both small and, to a lesser extent, erudite. (S)he has probably perfected that look over time, perhaps on a “day-to-day basis” where her colleagues and friends get a daily dose of petty correction from a Mortimer Adler wannabe. But Mortimer always presented himself as genteel and kind.

18 Anon October 17, 2017 at 6:05 pm

You’re on the internet, Vicky. Time to put on the big girl panties or go back to Facebook with the rest oversensitive people.

19 Christian October 16, 2017 at 3:48 am

What are your other 4 favorite management books?

20 david b October 16, 2017 at 12:24 pm

This was also my wonder.

21 So Much For Subtlety October 16, 2017 at 5:32 am

Definitely recommended, it is one of my five favorite management books ever.

I don’t want to add to the snark that has made this a rather snarky blog these days, but I wonder what TC’s background is? Or to put it in a more constructive way, are there management books for managers and management books for non-managers? Is the latter category divided into books for non-managers who are academics and non-managers who are ordinary consumers?

I wonder if managers ever read management books? Or if they are just for the unwashed masses who wish they were managers with, perhaps, a sub-section for MBA students pretending they are adding to the sum of human knowledge?

Is it time for a book on management books? Perhaps with legs so it can become a coffee table?

22 The Other Jim October 16, 2017 at 8:37 am

>just for the unwashed masses who wish they were managers

Bingo.

Although, also for authors who wish they had written famous books.

23 Art Deco October 16, 2017 at 12:10 pm

I wonder if managers ever read management books?

I’ve known one with whose reading habits I was familiar, and, yes she did. She held an important position in an organization supervising a crew of people whose skill sets she did not share. I think she functioned mainly as an advocate for her staff with her superordinates and the technical decisions were made by her deputy.

24 david b October 16, 2017 at 12:27 pm

I can attest that a couple of my manager friends who I respect very much and built successful business–one who came from the technical ranks and one who came from the ‘not technical experts but in charge of people who are’–advocate very strongly for this book.

Neither has an MBA though.

25 static October 17, 2017 at 9:27 am

Good managers read management books.

26 Kevin October 17, 2017 at 1:27 pm

Therefore bad managers don’t read management books? That doesn’t sound right.

27 carlospln October 16, 2017 at 6:30 am

THAT’S funny.

28 David Ting October 16, 2017 at 6:56 am

How would you compare this book to Ray Dalio’s Principles – particularly Part 2 about Life Principles? Thank you.

29 Bob October 16, 2017 at 9:36 am

It’s fun to compare the two books by looking at how they work, in practice. Horowitz’s success has a lot to do with having gotten really lucky, being in the right place at the right time: His time as a venture capitalist hasn’t been catastrophic, but there’s better firms out there. His book says many sensible things, although it’s hard to believe that they have led to his success. His advice sure led him to spectacular failure in the long run, but he just managed to exit positively.

Ray, on the other hand, has been incredibly successful by almost any standard, but anyone that has worked at his company will tell you that his principles lead to what is pretty much a dystopia. Everything sounds sensible on paper until it’s lived, and then it all looks like terrible mistake, and one wonders how in the world the fund was so good for so long. This is especially true now, when the numbers aren’t really as rosy anymore. The level of dysfunction is hard to imagine unless you live it: The principles sound good in the same way that communism sounded good in the late 19th century. 95% of the value in Bridgewater is brought in by 5% of the employees, and the others are, just like googlers, wasting time playing with the money fountain, in ways that sound great in theory, but not necessarily in practice.The cult-like zeal that the culture demands is quite the precursor to many Valley companies, but it can also be compared to the people in North Korea who have high status: Whether an environment that demands following zealous loyalty to certain ideas is seen as a prison of the mind or just a strange set of choices often comes down to whether the place has good outcomes, whether said outcomes had anything to do with the ideas.

So if there’s anything that we can learn from this two management books is that we can only really judge them in practice, as humans are terrible as trying to analyze something as complicated as management principles in a vacuum. Proof comes from whether said principles are repeatable, and key to successful outcomes. This is why you won’t find me arguing with the Toyota Production Model, which can be reproduced and seems like the one way to approach car manufacturing: If you do something else, you lose to any competition following the model.

30 Ray Lopez October 16, 2017 at 1:00 pm

@Bob – thanks, so it validates what my intuition told me: Horowitz, Dalio got lucky, and had enough skill not to drop the ball, but readers of their tomes will no more replicate what they did than an untalented reader of a chess grandmaster’s book will replicate the GM’s success over a chess board.

31 static October 17, 2017 at 9:39 am

It’s not about replicating, it’s about strategies to deal with analogous situations in one’s own life.

32 static October 17, 2017 at 9:37 am

What better firms are there over the the time frame Andreessen Horowitz has been running? Maybe Benchmark where Uber exceeds all of their other returns combined and is still at risk? Founders Fund which is driven by an unrealistic projected return on Palantir? They’ve totally changed the industry.

In any case, the book isn’t about VC, it’s fact that they got any return at all out of LoudCloud/Opsware. It’s actually impressive.

If you read Diallo’s book, they did go to zero in early days. It’s actually very similar to Toyota, in the sense that when something goes wrong, they don’t immediately blame people, they try to create a rule to prevent it from happening again.

33 rayward October 16, 2017 at 7:02 am

Are today’s titans of software the industrialists of the late 19th century and early 20th century? Of course, the titans of Silicon Valley (Horowitz and Andreessen included) built their success on what remained of the industrial giants of that bygone era (Loudcloud and Opsware for Horowitz and Andreessen). Scientific management was developed in the context of the industrial firm (F.W. Taylor and those who followed), which seems far more challenging (and beneficial). But I’m not a fan of Silicon Valley. https://www.nytimes.com/interactive/2017/10/13/opinion/sunday/Silicon-Valley-Is-Not-Your-Friend.html

34 Hoosier October 16, 2017 at 7:03 am

Better than Peter Thiels book?

What are the rest of your top five?

35 VM October 16, 2017 at 7:59 am

*Much* better IMO, though worse than the classic High Output Management by Andy Grove

36 Hoosier October 16, 2017 at 9:03 am

Interesting…. I greatly enjoyed Thiel’s book, but can’t really vouch for the content too much as I don’t have much entrepreneurial experience.

37 Rob October 16, 2017 at 10:48 am

Not even close to Thiel’s book, although it is a very different kind of book. Peter’s book is more strategic. How to structure your life, what markets to get into, how to think about business models. Horowitz’s has its merits, but I read it as less of a polemic against the traditional ways of doing business and more of a memoir of Ben’s experiences in the trenches.

By its very nature, Zero to One is prescriptive. Don’t go into the restaurant business! Differentiate your business! Find a niche market you can expand from! Create value, but more importantly, capture a large percent of the value you create! Probably better for VC’s than CEOs, but applicable to anybody who wants to understand business. Few people are in the position to actually act on the lessons, but they apply to all businesses. 5/5 Everybody should read.

The Hard Thing About Hard Things (THTAHT) is not that kind of book. It’s more useful for psychological ills and helping CEO’s feel not so alone in a vastly lonely job. The advice, if there even is advice that can be broadly applied, is along the lines of, “Man it sucks really bad and if you feel like it sucks, that’s ok because being CEO kinda sucks. Also this one time my company almost went under, and then it didn’t because I was able to put my ego aside and beg for more money.” That is advice, of a sort, but not very useful advice. 3/5 Most business people would enjoy reading.

38 static October 17, 2017 at 9:41 am

Yeah, I would put Phil Knight’s “Shoe Dog” in a similar class to Horowitz, but Shoe Dog is funnier.

39 Rob October 17, 2017 at 3:33 pm

Hey static, thanks for your reply. I like most of your comments in this thread and would be interested in a longer one-on-one conversation by email or phone. If you have the time, please shoot me an email: robert.terrin@tailriskconsulting.com

40 JohnT October 16, 2017 at 7:27 am

Same query as others: what are your other four favourite management books?

41 Ted Craig October 16, 2017 at 8:31 am
42 VM October 16, 2017 at 7:59 am

Same: what are the other four?

43 Kevin October 16, 2017 at 9:11 am

I could not disagree more. This book is not worth the read, and his take is terrible…I wouldn’t follow a single shred of advice Horowitz offers. This the only book I’ve purchased where I wanted my money back, and I’m a sucker for this category.

He’s successful, great, (and you’ll hear how successful he is) but please don’t do what he does or what he says he does. Do it your own way, trust yourself (please?). If you need to take advice from someone like Ben Horowitz then you’re already in the wrong spot…or so insecure you don’t realize you already have the goods. Terrible, terrible book.

44 Lee October 16, 2017 at 10:42 am

Care to provide an example of some bad advice from the book?

45 Kevin October 17, 2017 at 8:48 am

In a nutshell: everything he’s writing about is at the most fundamental level of common sense. If you need this book to remind you of what you already know, yikes..you don’t. “Don’t put it all on your shoulders”, “this is not checkers; this is motherfuckin’ chess”, “don’t take it personally”…oh boy. “The right way to lay people off: be clear” Granted, I’m picking things quickly because you asked and I don’t want to even skim this thing again. “Nobody cares, just coach your team” “Things always go wrong”. Is this insightful, new, valuable? Also, if you go to a school he’s never heard of, forget it…you’re not in his league. Horowitz is super successful, no argument there, but this is the most tired rehash of pablum that’s been dressed up with dirty rap (oh my!) to give it some sort of new, hip cred. Silly.

The writing is grating; the first chapter is setting up his bona fides, that he’s not just another white rich guy. He’s super cool and hip too! He’s not like all of the other valley elite, see? Last note on this point, the self-congratulatory story he tells about taking care of John Nelli was especially nauseating…”we were fighting for our lives, he was about to lose his.” Sickening that he felt he needed to share that in his own hagiography. It says a lot about him.

46 static October 17, 2017 at 9:51 am

So common sense to you is not common sense to all. Many people run into situations where they have to choose between two bad options and fail to pick one because they are so used to finding the happy path that they are paralyzed, leading to failure. Getting some confirmation from someone who succeeded that you have go the hard way can be motivational.

47 Mark Thorson October 16, 2017 at 1:47 pm

People always ask me, “What’s the secret to being a successful CEO?” Sadly, there is no secret, but if there is one skill that stands out, it’s the ability to focus and make the best move when there are no good moves.

A long time ago, a friend of mine worked in a lab where they needed a color monitor. This was back when color monitors for computers were very expensive. They had boiled it down to a couple of choices, but were spending time trying to decide between them. The lab manager just ordered them to pick one and buy it. His words were “Sometimes it’s more important to make a decision than what decision you make.”

48 carlospln October 16, 2017 at 4:22 pm

+ 1.

Here’s another: ‘To not make a decision is to make a decision’.

49 This guy October 16, 2017 at 11:12 pm

Personally I found this book infuriating, but illustrative of the principal-agent issues in venture capital generally: he spends the first half of the book bragging about how much of his investors money he lost! Basic steps for building wealth I learned from the book:
1. Get people to give you money with the understanding/obligation to build and run reasonable business
2. Be terrible at it, lose all of the money
3. Once the company has been marked down, assume control from outside investors, recapitalize
4. repeat previous steps until you have a good product and significant ownership on the backs of investor losses
5. write a smarmy book filled with platitudes and odd folksy anecdotes about how woke you’ve been since childhood
“Success” in this industry in building personal wealth is defined by failure as a fiduciary.

50 static October 17, 2017 at 9:48 am

Most people give up. Losing money on risks is part of the model. If you don’t spend the money in the way you promised to go for a 10x return, that’s a lapse in fiduciary responsibility.

The message is pretty simple, even though all this stuff happens, don’t give up.

51 Melanie October 28, 2017 at 5:22 am

I kinda wonder what Tyler’s basis for judging management books is. Has he managed a team of 50 to know what’s good or not?

52 istanbulda gezilecek yerler November 13, 2017 at 2:28 pm

Very good Tyler

53 istanbul gezilecek yerler November 13, 2017 at 2:29 pm

Thank you

54 gezilecek yerler November 13, 2017 at 2:30 pm

Thank you

55 istanbul da gezilecek yerler November 13, 2017 at 2:30 pm

Woow

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